LONDON (AFX) - Sterling spiked higher as the UK manufacturing purchasing managers index for January 2002 rose to 46.4 versus 45.2 in December, analysts said. The index, whilst remaining below the 50 mark, suggested an improvement in manufacturing conditions across the board. Steve Pearson, head of currency strategy at Halifax Treasury Group said the PMI helped sterling regain a bit of ground against the dollar. "Manufacturing is the most depressed sector and is likely to be the last to enjoy a positive growth but the signs are encouraging that we've seen the bottom," he said "It is notable that the leading indicators, such as orders, are now displaying a markedly slower rate of contraction, but nevertheless it is still a contraction," he added. "In terms of interest rates, there has not been a great deal of reaction to these numbers, the market is selling off on the back of the FOMC minutes of the December meeting," he said. At 10.00 am, sterling traded at 1.4107 usd versus 1.4092 usd at 9.15 am and was unchanged versus the euro at 0.6096.